Awkward story for Barney Frank

by Russ Roberts on July 30, 2009

This is an awkward story for Barney Frank. I particularly like how he absolves the bank of blame because they bought Fanny stock and it’s the government’s fault that the stock is worthless, not the buyer’s fault for exercising bad judgment.

UPDATE: And it wasn’t Fannie’s fault either. It was the government takeover that made the stock worthless. Something about this story reminds me of the guy who killed his parents and then asked the court to show him mercy because he was an orphan.

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Tagged as: bailout, banking, Barney Frank

Seth

Exhibit A: Clever people are capable bad things. What's scary is he gets by with it.

I like the Menendez brothers reference, but I think it was Russ or Don who said it even better on one of Stossel's pieces, something like, "It's like asking the arsonist to help put out the fire."

In this case, it might be more like asking the arsonist to be fire chief. You never know when he's going set your house on fire so he can come to the rescue.

vidyohs

For more on government idiocy check out this on Stossel's Take.

http://blogs.abcnews.com/johnstossel/2009/07/ev...

BoscoH

Actually, it wasn't "the guy". It was the Menendez brothers, Eric and Lyle.

mesaeconoguy

This is awkward, too:

http://online.wsj.com/article/SB123993403283927...

So is this:

http://www.boston.com/bostonglobe/editorial_opi...

mesaeconoguy

Rep. Brad Sherman, a California Democrat, says none of the Depression-era lawmakers who gave the Fed its power to lend to nonfinancial institutions “ever thought it would involve trillions of dollars”

Oooh, oohooooh, oohhh, sorry let me retrieve my governmental regulatory umbrella....

russnelson

The preferred stock (FNA) was worth something until the government made it worthless.

mhodak

Barney Frank is the cynical end-game of an education system that teaches kids that they can save the world while accepting little responsibility for their own lives. These kids become naive voters (and supplicants) who believe that they choose their representatives when, in fact, it's the other way around. And in order to keep his position, Frank uses his power to take care of his paying constituents; his paying constituents, naturally want a return on their investment.

Unfortunately, that's not what they teach in civics class. And this system is only occasionally the scandal that the media chooses to focus on. It should be encouraged.

Name

Awkward? It's not awkward at all.

He'd have to be able to feel shame in order to feel awkward.

Methinks

The problems with Fannie and Freddie started with the explicit government take-over. That's rich. Barney is just shameless and obviously thinks Americans are just morons. Of course, they keep re-electing him, so maybe he's right.

danielkuehn

Well - the problem with Fannie and Freddie stock prices started with the take over... the underlying problems that lead to the take over existed well before that.

Methinks

No, the problem with the stock prices did not start with the takeover. Stock holders are residual owners of the company and there was no residual left. Fan & Fred were bankrupt. Are bankrupt. Without the the take-over, the stock price would be zero.

vidyohs

Just repeat the quote from Joh Adams.

"one useless person is a shame, two a law firm, and three or more a congress."

danielkuehn

They couldn't have been the only bank with shares in Fannie! Even if that justification was legitimate in theory, they weren't the only one that got hit by that... and Rep. Waters's husband? That's even fishier to me. Ugh.